In my opinion, Tradesports performed splendidly this election. Many others will disagree; after all, Tradesports was responsible for that morose dinner I had last night with my patient wife. At 5:30, I was certain Bush had lost.

How could that wild swing - Bush down to 29%! - be anything other than a sign that this market is wild and unreliable? My answer is that the market showed us what was really happening. The election really was a nailbiter, and Bush really was likely to lose early on. I can make a damn good case, too.

A prediction market is not a crystal ball; nothing this side of Fairyland can predict anything which is not already predetermined. It is an information collection device, one that gives you the big picture and the overall odds, moment by moment. Think of it as an incident command center. You have a huge, complex incident to manage, data coming in from all over, and you need to collect this data, analyze it, and see how the big picture changes. It provides you with the best available knowledge for making a prediction about what is likely to happen, and for telling you what you ought to do about it.

And what do you do? In the case of a prediction market, when your position goes to shit, you sell. That's not cowardice or irrational volatility, that's the smart play. It's not like we are talking about a long-term investment here, like stocks or bonds - this something that goes up and down, but usually trends upwards over time. It's winner-take-all, and it gets called within hours.

If I have a lottery ticket that represents a one-in-three chance of winning a dollar, it's worth about 33 cents. If I have something that is worth 33 cents, and somebody wants to buy it for forty cents, I'll sell it instantly. Yes, the odds on that ticket might change later, and maybe they won't. I consider everything, and if my best-guess price is still 33 cents, I'll sell it.

And no, it doesn't matter what I originally paid for it, either. Once the best-guess price falls below what somebody is willing to pay, the only correct response is an instant sale. If you think another strategy makes any sense, it's probably because you don't understand what "best-guess price" really means.

At 5:30 last night, the best-guess price on Bush was 29 cents. The market predicted - correctly - that Bush needed both Florida and Ohio, and early returns from both states looked bad. Knowing only what we knew then, 29 cents was about right. I didn't snap up these shares. In all likelihood, neither did you.

Critics may say - correctly - that I am full of shit with this defense. Predictions are predictions. Tradesports could have predicted anything, and I could justify it after the fact by saying, "but that's what really happened". My "damn good defense" is pointless.

That's right. If my only defense of Tradesports were the wild fluctuations on display last night, there's be no case at all.

All along, this market was right. The toss-up states really were toss ups, and the minute-by-minute race exactly reflected it. This was undecided until the end, and the market predicted exactly what states would be decisive. We knew everything that was knowable just by glancing at the page.

The final proof of the predictive power of election markets will not come until many more elections have passed; if I remember my freshman statistics correctly, it's going to take quite a few rounds before we have a definitive answer. Since major elections are years apart, we will all be long dead before that time.

Personally, I have an awful lot of faith in this method. The trick is just to understand the difference between what is predictable, and what is not.

The full translation of the Bin Ladin tape is now available, and it's remarkable. Bin Ladin talks about what a crappy president Bush is... how he's lost jobs, increased the deficit, spilled blood for oil, and - I shit you not - he even mentions Halliburton!

I wish I could tell you who was going to win this election, but I can't. The best I can tell, it's going to be fucking close, almost a toss-up. Anything could happen.

One thing that certainly won't happen is that we hold any sort of a national election for president here in the US. We don't hold national elections, and never have; instead, we'll hold fifty different state elections, all at the same time. Each state makes up its own rules, administers its own election process, tabulates its own results, and resolves internal disputes by itself, using their own procedures as interpreted by their own lawyers. Each of them are different; each is imperfect; each is uncomfortably open to widespread fraud, and each is likely to be staffed with several well-meaning but shockingly incompetent people, with a handful of honest-to-god scam artists thrown in.

There is simply no way for us to hold a close presidential election which is going to be clean enough for the current electorate to accept; unless one of the candidates can surprise us all with a decisive margin of victory, we will be entering election-dispute hell, and that we will be staying there for several months.

Once that happens, here are three things you can absolutely count on:

1) Bush stole the election. If he wins - or even if he just claims a win - there is zero chance, none, that charges of fraud will not loudly be raised. It's as good as pre-stolen. Furthermore, blacks will be disenfranchised by the millions, quite possibly even the billions. This story is already written and carefully rehearsed; whatever actually occurs is irrelevant. Every mainstream media outfit will trumpet this like it's news, and many people will believe it, too.

2) The final call is going to be made by Federal judges, probably under the Equal Protection doctrine. Equal Protection, like the Commerce Clause, is sort of an all-purpose method for the feds to assume authority for everything, even those things which are, constitutionally, explicitly under the control of the states. We will pay dearly for this down the road, because every fucking election for the rest of our lives is likely to be settled this way. After all, once an unelected, unaccountable branch of government assumes final authority over the election process itself, what could possibly go wrong?

Oh, yeah, and there might be only eight justices this time, instead of nine. Think about that one for a minute.

In the Supreme Court, ties default to the status quo - they means they uphold whatever the lower court decided. So, if this election gets decided by some harebrained district judge in the middle of butt-nowhere, he's likely to set precedent for the entire nation. I'll bet you the entire contents of my checking account that both sides have already considered this, and have already pre-selected which judges they will appeal to in each contested district. (After all, what could possibly go wrong)?

3) No matter who wins, the Democratic party is going to enter into a major crisis.

A Kerry loss will smell a lot like 1968. I honestly expect to see something of a return to the small-scale domestic terrorism we saw during that time; the Weather Underground, the SLA, the Black Panthers and other disaffected leftists wreaked a surprising amount of havoc for a while. It's quite possible they may have a few contemporaries, people who feel they had been excluded from the political process and who are ready to bomb and shoot their way back to the table. (Undoubtably, these folks will revert to the old 1968 playbook. They will be quickly realize that law enforcement is using the newer 2004 playbook, and they can discuss it amongst themselves while they are rotting in jail).

A Kerry win might be little better. Even if Kerry is a good guy - hardworking, honest, capable, and doing the best he can - his only real mandate now is simply to remove Bush, and it will be gone the moment he is sworn into office. He will be compelled to lead a nation of mostly hawks, and to do it with a Republican house and senate. The anti-war wing of his party has a serious disappointment waiting for them in 2005.

Kerry is not going to deliver huge tax hikes, or heath care for everyone, or a quick way out of Iraq; the legislature is simply not going to go along. He is not going to bring you Osama Bin Laden or reduce terrorism to a nuisance, either; he's just going to be a freshman president, facing a hostile legislature and a deeply divided, mostly pro-war electorate. The Republicans are going to pound the crap out of him at every opportunity, and he will have very little to use against them.

What's he going to do, threaten the Republicans with the seething, untapped power of the dovish middle?

Pro-war Democrats don't concern me; they are mostly sane, and they seem willing to put their nation first. The antiwar left is going to implode, and it's just a matter of how much damage they do on their way to history's dustbin.

I am currently working towards my EMT-basic recertification. We have a specific policy on this sort of thing, and it's a good one:

"You're of no fucking use if you're a victim."

There is a reason why the bad guys like to place secondary devices, timed to kill the rescuers who respond; if you kill or disable the rescuers, there won't be anyone around who can quickly replace them. If there is no one left to do the important work of saving the victims, more of them will die.

Yes, this can look a lot like cowardice, and yes, it requires tremendous professional discipline to back away from a hazardous situation when there are helpless people in your care. Most medical folks will instinctively defend their patients to their last dying breath, and would not abandon them for anything. It's a fine and noble thing, but it is not always the right thing to do. In a mass casualty incident, that handful of doctors, EMTs and First Responders available to you are like gold. You need to protect them, or else everyone loses.

A not-infrequent and terrible example can be found in any low-oxygen confined space. A rescuer looks in, and sees a person down. He enters so that he might help, finds that he is inexplicably dizzy, and falls to the ground himself. His partner, disregarding his own safety, comes in to help...

Sometimes you'll have five or six dying people piled one atop the other until somebody figures out what's going on; then cooler heads prevail and you decide to do the right thing, and wait until the scene is made safe. Then you hope there are enough of your team left alive to provide the assistance that is now so desperately needed.

If you must endure a ten minute delay to stabilize the scene of a bombing, most of your recoverable victims will still survive. If you sacrifice most of your team in a well-intentioned but futile act of courage, theirs will not be the only additional lives that are lost.

This is the sort of grim math that matters, and the sort of discipline that separates the professionals from the amateurs.

Having said all that, the actions of the FDNY on 9/11 were not only genuinely heroic, they were probably, in the final analysis, correct. The looming collapse of the World Trade Center in the midst of a full evacuation was a remarkably unusual event. These firefighters were herding people out by the dozen, saving lives every second they were there. Unlike a medical tech at a trauma scene, who might spend several minutes attempting to recover a single victim, these folks were saving many lives per minute. I am confident they knew exactly the danger they were in, and that they knew their worth as they held their posts. They traded away their lives that day, but got good value for their sacrifice. It was more than you could reasonably ask of anyone.

They saw their duty and rose to it as one, and quite frankly, I am in awe of them. Knowing that, I would also be the first, if necessary, to physically drag my team away from a suspected bomb. I do not feel that there is any conflict here at all.

I made a big, fat, stupid mistake in an earlier post. I'd like to thank my brother in law, Karl, for bugging me about this until I finally figured out what I did wrong.

I have been insisting for the last several months that the number of jobs in this country is at an all-time high. This is incorrect; the high point was January, 2001, and there have been job lost since that time which have not been regained.

The latest firm numbers are for June, 2004, where we have 131,258,000 jobs. On January 2001, there were 132,388,000 jobs, a difference of 1,130,000 jobs, representing about a 0.85 percent loss.

My mistake? I misunderstood the term "Civilian Labor Force" - it means the number of people who either have jobs or are available for work, not the number of people who are currently working. The Civilian Labor Force is at an all-time high, and I misunderstood this to mean that the number of jobs was at an all-time high.

Stupid.

I do stand by the rest of my assertions, however; the jobs we do have are better-paying jobs, certainly much better than they were when Clinton ran for reelection at the end of his first term in '96:

[Note this these are 'real dollars', already adjusted for inflation]

And the unemployment rate - which represents how many people are actually looking for work - is virtually identical to that during Clinton's 1996 reelection bid:

So, I was, like, 66% right. If anybody wants to nominate me for the Dan Rather Accuracy In Reporting Award, I think I've earned it...

They tried to depress the price of the Bush-wins-the-election market by dumping all their shares at rock-bottom prices. The market, of course, instantly recovered, and they ended up blowing ten grand for nothing.

I rode a bike for a long time - right up to the point when my ruined right wrist wouldn't go back far enough to twist the throttle anymore. (Note to self - next time, let go of the handlebars before vaulting over the back of the car).

That's the problem with objective hazards; it's not if, lads, but when.